Natural Gas Price Outlook – Natural Gas Gaps Lower

Natural Gas Technical Analysis

The natural gas market gapped lower to kick off the trading session on Monday, shot higher to fill that gap, and then pulled back. Interestingly enough, that gap being filled was right at the 200-day EMA, so we have a lot going on in this chart. We had that explosive, massive move to the upside at the beginning of the Friday session, which had yet to be filled when we rolled over into the November contract. The 50-day EMA sits right at $3.05, right in the middle of that gap. So, we’ll see if that comes into play as well, or if we just simply gap and go.

Ultimately though, natural gas is entering a higher demand time of year as colder temperatures are coming to the Northeastern part of the United States. So, because of this, I have shifted my attitude from selling natural gas to buying natural gas. I just need a nice, clean setup. If we can break above the top of the Friday candlestick, I’m probably going to buy it there. If we pull back, I’d be very interested in getting closer to the $3 level on some type of bounce so that you get on the right side of the V pattern on short-term charge.

All things being equal, I do believe that natural gas will work its way back up to the $4 level, but it’s a little early in the colder months to start thinking about that. We’re just trying to price in something November related, so it’s going to take its time.

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